Transcript DOCUMENTATION - CAB

DOCUMENTATION
PRESENTED BY
VAIJAPURKAR C.G.
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TOPICS TO BE COVERED
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WHY DOCUMENTS ?
DEFINITION OF DOCUMENTS.
OBJECT OF DOCUMENTATION.
IMPORTANCE OF DOCUMENTS.
TYPES OF DOCUMENT.
PURPOSE OF DOCUMENTATION.
Secured Advances
Modes of Creating Charge
ADMISSIBILITY OF DOCUMENTS AS AN
EVIDENCE.
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WHY DOCUMENTS ?
 To protect from willful defaulters.
 To establish RIGHT & OBLIGATION
 EVIDENCE of transactions.
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Difference between documents
& instruments
 The Section 2 (14) of the Indian Stamp Act, 1899
calls the first-type of document as instrument.
According to it “the document by which any
Right or Liability purports to be created,
transferred, extended, limited, extinguished or
recorded is called as an instrument.”
 Thus, the bonds, conveyances, leases, mortgages,
agreements, D.P.Notes, bills of exchange can be
considered as instruments and they are required
to be stamped according to the law.
 The Second – Type (above ) of documents need
not be stamped i.e. Statement of account,
Voucher, stock-statement, Notice of recall, letter
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or application of customer etc.
FIND OUT DOCUMENT &
INSTRUMENT
 Share certificate
 Account opening
form
 Cheque book.
 Office order.
 Circulars.
 Debit vouchers.
 Pass-book / statement
of account.
 Fixed deposit receipt.
 DP Note.
 HP Deed.
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DEFINITION OF DOCUMENT
 Sec 3(18) of General clauses Act,1897
 “Document should include any matter writing or
express upon any substance by means of letter,
figures or marks or more than one of there
means, which is intended to be used for the
purpose of recording that matter”.
 Sec.3 of Indian Evidence Act 1872.
 “Any deed or writing or inscription that furnishes
evidence”
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OBJECT OF
DOCUMENTATION
 Acknowledgement of debt by Borrower.
 To sue the Borrower
 Clarity of contract.
 To realized the security charges
 Audit purpose
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IMPORTANCE OF
DOCUMENTATION FOR
BANKERS
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Identification of Borrower.
Identification of security
Creation of charge on security
Settlement of terms & conditions
Period of Limitation
Evidence of Transaction
Prevention of fresh charge on security
Filing of suit & enforcing claims.
Safety of Banks fund.
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PURPOSE OF
DOCUMENTATION
 Legal capacity to execute the documents.
 In the prescribe form of the Bank
 Properly Stamped
 Properly witnessed if required.
 Registration of documents.
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TYPES OF DOCUMENTS
 Auxiliary Document-Supplementary to
main document
 Primary document- right to recover the
amount
 Security Document- charging property
 Composite Document-vehicle loan
agreement
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Secured Advances :
• Cardinal principle of sound banking is to
ensure safety of funds lent by banker to his
customers.
• The banker therefore relies on primarily on
the 3 C’s of borrower.
• Secured advances are those advances which
provide absolute safety to the banker in means
of charge created on the tangible assets of the
borrower in favor of the banker.
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Modes of creating charge :
- Lien • Section 171 of the Indian Contract Act
confers the right of general lien on the
banker.
• The banker is empowered to secure all
securities of the customers, in result of
the general balance due from him.
• The ownership of stock securing is not
transferred from the customer to the
banker.
Negative Lien :
• The borrower gives a declaration to the banker
that his assets mentioned therein are free from
any charge or encumbrance.
• He also gives an undertaking that he shall not
create any charge or dispose them off without
permission of the banker.
• The borrower cannot dispose of the assets or
create any charge there on without the consent of
the banker.
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PLEDGE :
• Sec. 172 of the Indian Contract Act – 1872
defines pledge as ‘bailment of goods as security
for payment of debt or performance of a promise.
• The person who offer security is called –
PLEDGER
To whom it is offered is called – PLEDGEE
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HYPOTHECATION :
• Which is another method of creating charge over
the movable assets, neither ownership nor
possession of goods is transferred to the creditors
but an equitable charge is created in favour of the
latter.
• The banks retain in the possession of the
borrower, who bind himself under an agreement,
to give the possessions of the goods to the
banker, where the banks require to do.
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MORTGAGE :
Sec. 58 of the transfer of property Act 1882 defines
mortgage as –
The transfer of an interest in specific immovable
property for the purpose of securing the payment of
money, advanced or to be advanced by way of loans,
an existing or future debt, or the performance of an
engagement which may give rise to a pecuniary
liability.
In this case transfer is called
“MORTGAGOR”
Transferee is called – “MORTGAGEE”
Principle money & Int. thereon is called –
“MORTGAGE MONEY”
Instrument is called – “MORTGAGE
DEED”.
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FORMS OF MORTGAGE :
•Simple Mortgage
•Mortgage by condition sale
•Usufructury Mortgage
•English Mortgage
•Mortgage by deposit of title deed
or equitable mortgage
•Anomalous mortgage
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ADMISSIBILITY OF DOCUMENTS
AS AN EVIDENCE
 Wording-Printed form,ink,single sitting.
 Stamping-Instruments are stamped,
a)Adhesive,b)Special Adhesive impressed
stamps.
 Execution-Type of borrower, Minor,
illiterate, HUF
 Attestation- Assignment,mortgage,will
 Registration-4 months mortage,30 days
registration
 Limitation-3 years from death of
borrower,member,nominal member,12 years
immovable property
 Document Execution register.
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Nature OF Documents to be
obtained from borrower
 Constitution of Borrower –Individual,joint,sole
proprietor,firm,trust,society.
 Nature of advance – term loan,cashcredit,demand loan,TOD.
 Nature of security –Tangible,intangible,personal.
 Type of charge – pledge,hypothecation,mortgage.
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GOOD APPRAISAL + BAD
DOCUMENTATION = BAD ASSETS.
BAD APPRAISAL + GOOD
DOCUMENTATION = BAD ASSETS.
GOOD APPRAISAL +GOOD
DOCUMENTATION =GOOD OR
STRONG ASSETS.
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SCHDULED OF STAMP
DUTY IN MAHARASHTRA
(w.e.f. 7.5.2005 )
Affidavit- 100.00
Indemnity Bond - 200.00
Power of Attorney – 100.00
Redemption deed –200.00
Bank Guarantee – 100.00
Counter Guarantee – 300.00
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THANK YOU
FOR PATIENT LISTENING
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